Sosandar Regulatory News (SOS)

MedaVinci plc ( "MedaVinci" or the "Company")

Placing to raise £1.5 million

Highlights

The Board of MedaVinci is pleased to announce that the Company has raised £1.5 million, before expenses, through the issue of 375,000,000 new ordinary shares of 0.1p each ("Placing Shares") at a price of 0.4p per share (the "Placing").

The Placing is conditional on the Placing Shares being admitted to AIM ("Admission"). Application has been made for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares will commence on 8 December 2010. Upon Admission the Placing Shares will rank pari passu in all respects with the existing ordinary shares in issue.

Background

In September 2010, the Company acquired 49 per cent. of the issued share capital of Orogen Gold Limited ("Orogen Gold") for a total consideration of £370,000 in cash and ordinary shares, with an option to acquire the remaining 51 per cent. within 12 months. Orogen Gold was formed to hold investments in companies involved in mineral exploration and related activities and is seeking to explore and develop gold deposits in Europe.

The Initial focus is on the Deli Jovan Gold Project, a 69 sq km permit-area in eastern Serbia covering two historical shallow underground gold mines (the Rusman and Ginduša Mines), that were last in production pre World War II, and over which Orogen Gold has an Earn-in Agreement. Under the Earn-in Agreement Orogen Gold has the right to an initial interest of 55 per cent. in the Deli Jovan Gold Project if it spends a minimum of C$1.5 million (£945,000) on exploration by 20 June 2012 and a further interest of 20 per cent. upon an additional spend of C$2.0 million (£1.26 million) by 20 December 2013, giving Orogen Gold an aggregate interest in 75 per cent. of the Deli Jovan Gold Project.

Strategy

The initial objective of a detailed and phased Exploration Programme is to demonstrate an initial 100,000 oz inferred gold resource at the Rusman and Ginduša Mines which is envisaged to be sufficient to under pin two to three years of mine production.

The initial stage Phase I Exploration Programme, which will comprise surface trenching, re opening and re sampling three underground levels at the Rusman and Ginduša Mines and may also include some diamond drilling. This phase will also include reconnaissance exploration along the eight kilometre trend which includes gold prospects at Cuka Perina and Seliste. Phase 1 works will cost approximately £600,000 (C$950,000) and is expected to take 12 months. The second stage Phase exploration programme will involve driving new underground development with detailed channel sampling intended to confirm lateral continuity of mineralisation. More systematic diamond drilling from the surface is intended to confirm further lateral and depth continuity of the mineralised structures, is expected to cost approximately £1.1 million (C£1.74 million) and to take a further 9 months.

Contingent on success in Phase I, a Phase II Exploration Programme will commence which will include diamond drilling and new underground development and sampling to determine whether there are sufficient gold reserves to support an initial two to three years of production. Once in production the intention is to fund the blocking out of new resources from cash-flow and this will involve extending underground headings to determine grade and drilling to establish continuity in the lodes. It is estimated that Phase II will cost £1.25 million (C$1.97 million) and will take 12 months

MedaVinci's medium term strategy is to develop Deli Jovan as a revenue generating project which will provide a base to expand into other gold project exploration development opportunities in Europe and further east.

Placing and Use of proceeds

Under the terms of the Placing Agreement, Xcap Securities plc ("Xcap") has used reasonable endeavours to procure subscribers for the Placing Shares and will receive a commission on the gross funds that they have raised. In addition, Xcap has been granted warrants over 5 million new ordinary shares exercisable within 5 years of the date of Admission, at an exercise price of 0.4p per share.

The net proceeds of the Placing will be used to fund both stages of the Company's Phase I Exploration Programme at the Rusman and Ginduša Mines.

Related Party Transaction

The Directors are participating in the Placing as follows:

Mr Michael Hough, director, subscribed for 25,000,000 ordinary shares in the Company pursuant to the Placing. Following this subscription, Michael Hough is interested in 107,500,000 ordinary shares in the Company (representing approximately 7.94 per cent. of the issued share capital).

Mr Glyn Hirsch, director, subscribed for 7,500,000 new ordinary shares in the Placing. Following this subscription Glyn Hirsch is interested in 90,000,000 ordinary shares (representing approximately 6.65 per cent. of the issued share capital).

Mr Adam Reynolds, chairman, subscribed for 12,500,000 ordinary shares pursuant to the Placing. This subscription was effected through his shareholding in Diablo Consulting Limited, which subscribed for 25,000,000 ordinary shares, in which he holds 50 per cent. of the issued share capital. Following this subscription, the total shareholding of Adam Reynolds in the Company amounts to 55,500,000 ordinary shares (representing approximately 4.10 per cent. of the issued share capital).

Mr Paul Foulger, finance director, subscribed for 12,500,000 ordinary shares pursuant to the Placing. This subscription was effected through his shareholding in Diablo Consulting Limited, which subscribed for 25,000,000 shares, in which he holds 50 per cent. of the issued share capital. Following this subscription, the total shareholding of Paul Foulger in the Company amounts to 55,500,000 ordinary shares (representing approximately 4.10 per cent. of the issued share capital).

The Directors' participation in the Placing is a related party transaction under the AIM Rules. The independent director of the Company being Michael Nolan, who has consulted the Company's nominated adviser, Zeus Capital, considers the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Adam Reynolds, Chairman of MedaVinci plc, commented: "This is a significant step forward for MedaVinci and the net proceeds of the Placing will be used to fund the Phase I Exploration Programme at the Deli Jovan Gold Project".

Contact Details:

MedaVinci plc

Adam Reynolds Tel: +44 (0) 207 245 1100

Paul Foulger

Zeus Capital Limited Tel +44 (0)161 831 1512

Ross Andrews

Tom Rowley

Xcap Securities plc Tel: +44 (0)207 101 7070

Tim Burge

Karen Kelly